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tv   Bloomberg Markets  Bloomberg  June 9, 2016 12:00pm-2:01pm EDT

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>> from bloomberg world in new york. good afternoon i'm scarlet fu. >> stocks ending weekly today. too far.running safety trades are pushing treasury yield. >> same happening in commodities. crude oil dropped for the first time in four days. georgeionaire investor returned to investing. through the u.s. trading day. we want to get a snapshot. if you're starting with stocks, equity indexes are at lows
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>> soros didn't help matter. were getting little bit overbought. we talked about frequently. was getting closer within a half percent of its all time record close. the dow and the nasdaq also have days.allying for a few he certainly again did not help matters. looking at some big percentage declines. them.l is one of offshore driller seeking to cut debt load. investors don't like the shares down 10%. nrg energy that stock downgraded to sell over ubs. says it's not justified. chesapeake energy also getting downgrade. this one coming from rbc. saying there are opportunities risingvalue in a commodity environment. for chesapeake they're more
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amongstthan they are some of the peers. we're looking at restoration hardware. numbers came out with that missrd estimates. loss.ed unexpected also had a disappointing forecast and it's pulling down some of the other home retailers. also feel the pain today. i talked earlier in the day falling.ks asset managers also falling. if you have a big name like soros doesn't have the prospect for these companies that manage retail investors money. investors money, chart.ting take a look here. was is something that brought to attention. that foreign investors are selling u.s. equities. have unloaded $128 billion worth. theseou have unusual see kind of things.
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you see here this decline that thee seen thus far over past year. that's another not necessarily good stein for stocks. a look about this rally. it's surprising to see those kinds of numbers. is.t really when you take a look at the action today. would it be fair to say that a is in play? >> definitely seems like it's a risk. risk off safety dichotomy. they're going into gold. which is one of the places they classically go when investors are feeling nervous about global growth. they're going into the japanese yen. another frequent target of people's nervousness. you see the dollar falling against the japanese yen. catching in the vix was rising over the past few sessions. the vix.ideways for over the past three days, we've
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seen an increase which is stocks at a time when are also up. >> that is. maybe we'll see how that pans out. red flags are starting to appear. thank you so much. on the bloomberg news this afternoon. more.rump ton has >> thank you so much. president obama and democratic presidential candidate bernie sanders are meeting at the white house at this hour. under way.g got senator sanders is under pressure to drop out of the race. since hillary clinton became the presumptive democratic nominee this week. to president is expected formally endorse mrs. clinton meeting.ay's bloomberg margaret is lyre at house.te will the conversation be more akin to the president saying, you've. a good run. now it's time to let hillary move the ball forward? president would like for senator sanders to feel
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that way. but he and the clinton campaign want to tread carefully. they want this to happen on bernie sanders's timing. what of we expect him to talk about is him now. is the idea of what he can do to going, hisvement proposals. what he wants the democratic party to embrace and how to keep grassroots energized. president obama can talk to him experiencesrsonal when he ascended to clinton the expectedn and what he from hillary clinton. but his idea is not to push sanders to ao get position where he is ready to take that next step. administration is very keen on saying that they appreciate that senator sanders has energize the democratic base. you seen the polls, there seems between thet sanders contingent and hillary clinton contingent. not a stretch to say some
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of senator sanders supporters do mrs. clinton. >> that's right. that's why the white house and the clinton campaign feel it's sanderstant for senator to want to do the next step to have a feeling that he has some over how he does it. rather than being pushed aside. likely to embrace her, not sort of because he has to.ut he wants we do expect the president's endorsement to be forthcoming, we don't know exactly how quickly it will happen. lot of that may depend how this meeting has been going. >> margaret, it's interesting, you recall back in 2008 when president-elect obama had a meeting with mrs. clinton. that meeting i believe was at feinstein'se residence of washington dynamic, to try to smooth over some of feeling that took place during that campaign. is there any sense that the suggest thatn may mrs. clinton and senator sanders sit down and have a face to face deal with this?
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>> okay. we expect that to happen. timing.question of it did take at the time, senator aftern about four days that pivotal primary night for herself to beound ready to talk about the next step and turn her support over to president obama. expect that secretary clinton will want to sit down with bernie sanders face.o >> joining us live from the white house. thank you so much. democratic senator elizabeth warren of massachusetts will take her involvement in the presidential campaign. new level today. to harshlyted criticize likely republican nominee donald trump over comments he made about the ancestry of a federal judge. senator warren said donald trump weapon.cism as his but his aim is exactly the same republicans.f the house speaker paul ryan unveiled
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the national security part of republican's new agenda. while his plan calls for strength. military he also discussed securing u.s. talk ofbut there's no donald trump's proposal to build a wall between the united states mexico. on capitol hill the house and the senate will try to resolve their differences over funding find the zika virus. the senate voted to provide $1.1 billion. the house approved little more than half that amount. texas predicts the measure will be passed by next week at the latest. global news 24 hours a day. journals and00 more than 150 news bureaus around the world. i'm mark crumpton. you.to >> thank you so much. let's turn now to commodities. oil is pulling back today after run up to 10 month high yesterday. wti jumped as much as 95%.
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>> yesterday, we saw something between oil and oil stock. here. look at bloomberg this is chart number 1609. it's a little bit weird. is the oilline price. line is s&p energy stock. in crude we saw rally prices oil stock went nowhere. today we see a little bit more convergence. ofhas created a lot volatility. joined now by kris kelley. do you think this divergence will be the new norm are they ofng to back? volatility. joined now by kris kelley. do you think this >> i think they'll probably go back in lock step. we had a view for a while that end probably go somewhere between 50 and is we . people are confused on where we
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go for $60. the problem the next six months. view that wef the probably end up between 50 and $60. $50 is kind of that tipping wait andre we have to see if rigs come back in the market and if u.s. production again.to increase which is a bad sign. you're bullish on energy and oil particular. >> so, with regard to the recovery in oil prices it's than just knee jerk reaction to the dollar. we've seen both crude rally of may.much what do you attribute the severe jump in may to? of it just natural rebalancing of the market. we're filing starting to draw down.ories but at the same time, we've also had canadian wildfires, which the market.ff problems in nigeria. it's been a combination of things. >> i found this really interesting. you have to take a look at this chart. in the u.s.on actually came back,
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huge0-barrels a day, not but zoom in here so you can get the perspective of it. an increase. kris to your point, we did see rates come back a bit. how do you interpret these kind of signs now. of data.ne week most of the production increase was from alaska. down.48 was still what i would say is, we need to probably wait two to three more see if it's an actual response to breaking $50 a barrel. to uptick inlead drilling? >> it might. if we get more rigs that coming the market, people are going to be drilling again, production is going to come back. it's probably going to be with a lag. but it will come back. >> what kind of lag? >> two to three months my best guess. >> you hear anything from two to two years.s or what kind of stocks do you like in this kind of uncertain environment? >> we're big believers that the
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call on shell oil will be coming forward in about 2017 and 2018. that beatenpaces you up the most is mlp. the favorite stocks, they have a very dominant competitive advantage through their network of asset. the oil side and partially on side.s come waiting for volumes back in the u.s. you get a nice 5% plussivened yield. >> the issue is mlp. retail investors in there. we do see other selloff if a risk what run happened in the the beginning the year. these guys don't want to hold names. >> we love that. the fundamentals have changed. it's a technical factor. investors want to sell them, call us. we're more than happy to buy them. willing to hold things far very long time if that's what it
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the return. we're more than happy to deal with the technicals. >> when you talk to these companies, like edp, what are they saying their biggest fear? the recovery and the bottom in february. all signs go now? >> everybody's biggest fear is the hardest to predict. long term demand instruction. if you look at the cost curve the far left lower left hand side of the cost curve, u.s. is right there above opec. you're of the view that opec is tapped out on production, are through the end of the decade. it's going to? back to u.s. smell. if you're mid stream company, you operate these tow road, you wait for the volumes to come back. like darko is a take out target? the only reason why we're in it.
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we do like it. do think the assets will be attractive. they've got a deep pool assets d.j. pace orthe gulf of mexico. bethink they would .nteresting to an ioc >> we've been waiting. reluctance for anything to happen. >> big question that we ask ourselves at the same time. companies have a better view into oil market pretty much anybody. it's a little surprising to me that nobody has pulled the trigger outside of shell and bg. we think if we sit at $50, if we get some stabilization, it's going to pick up probably within the next six months or 12 months. >> i was talking about anna darko, they do have a lot of debt. exxon burned with xto.
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a companyay out for that have a lot of debt? their of debt is tied to midstream asset. outside of a, they do have a decent amount of debt. andadarko, it's a really big company. pretty small ed. we think that they would find canassets attractive and things.some >> kris, thank you very much. kris kelley. this afternoon on "bloomberg markets," two live interviews that you can't miss. at it's am. -- special. we're going to hear from chairman and ceo found of continental resources after his meeting with donald trump on energy independence in america. that will be interesting. >> i'm excited.
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>> you're watching "bloomberg markets." i'm scarlet fu. >> i'm alix steel. >> disney getting ready to throw open doors in china. we'll hear from bob iger. soro is is making bets. take, rise's quick of islamic state and what is being done to combat the terrorist organization. from south move korea central bank. record lowe, bank of korea cited a growing risk. it mentioned the government's
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push to restructure companies with a lot of debt. big green energy project will cost germany utilities more than twice as much as expected. estimating they will spend $11 million to wind turbine in the north. one big reason the german government says the main power cable needs to be buried underground. >> after five years of construction, 20 years and $5 billion layer, disney is set doors ofopen the mainland china theme park. bob iger spoke with bloomberg the challenges in the region. >> entering this market has its challenges. has its challenges. regulatory issues. in making decision how to enter waymarket, we felt the best to do it was with a theme park. expensive. are this one cost in the $5.5 billion for instance. it's a big bet on a big market. it represents not only our
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biggest interest into this market but the potential to deliver great growth for the company. >> amazon has jumped into the grocery market. fresh food delivery service will eastailable in central and london. it is the first time the company thered service outside of u.s. >> billionaire investor george soros has returned to hands on trading. sors has become more involved in trading. concerned about the outlook economy.obal >> it is time for bloomberg where we provide context and background on issues of interest. islamicsy to agree state is in a menace. what to do about it is a different story. situation. islamic state has reached beyond declaring world by
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responsibility for attack terrorist attacks in paris. u.s. and europe redoubled pledges to fight the organization. more americans are in syria and the troops are defined noncombatants with the role of advising syrian rebels fighting the islamic state. commanders have said defeatly islamic state will take a decade or two. background, in 2003 a narrower u.s.-led coalition to oust hussein. establishes. was like al qaeda which eventually disowned -- islamist state aimed to claim a purified islamic society.
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openly target muslim consider whom they heretics. argument. u.s. president barack obama continued to reject the use of significant combat forces in the islamic state. saying the u.s. does not want to occupy another country without a way out. skeptics say middle east governments are distracted by or too weak or effective.o be critics argue that world powers aren't doing enough to defeat the group. is global business report for -- >> just ahead on "bloomberg markets," mystery stock of the day. get ready. up bestpick is cooking game since january. chilly news on earnings. guesses?
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>> this is "bloomberg markets." markets head down to big reveal on the mystery stock. best gainsng up since january. news on earnings. >> your best was chilis. owned by brinker international. you're correct. ticker for one. macaroni grill and capital grill. the company says earnings will the low end of its fiscal forecast. but the things will look up next week, which comparable sale will half percent to two percent. it also says the 4th quarter comparable sales will improve the third quarter but might remain negative. shares,ook at the
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they're holding up pretty well. up about 5%. are happy investors with that outlook. s casual dining stocks. tradinghose are also higher along with brinker. even if you don't know who owned chilis? >> what was the last time you ate at chili " >> never. never ate at chili's? >> thanks. coming up next, what is causing to handsros to return on trading. we'll break it all down for but you. this is "bloomberg markets."
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>> live from bloomberg headquarters in new york. markets." "bloomberg let's begin headlines.
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more.rumpton has sanders and president obama are holding talks a the white house. out under pressure to drop of the presidential race since hillary clinton became the presumptive nominee this week. the president is expected to mrs. clinton. puerto rico lost supreme court thet the question of sovereignty. the justices said puerto rico is not the equivalent to a state when it comes to the double -- clause which bars multiple prosecutions for same conduct. michigan governor rick snyder is sign legislation of detroit financially troubled schools. bailout offers detroit schools a fresh start that will put more money in the classrooms provide stability for
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teachers and fiscal consideration. district in danger of running out of money. two political foes join forces in northern ireland to speak out against brexit. former prime minster warned that leaving the european union can threaten peace in northern ireland. pieceswill throw all the of the constitutional jigsaw in .he air i'm mark crumpton.
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>> i think there's a lot of that are concerned with capitalk in the markses. i can interest rates are low. are tight. monitory authorities around the world. thatf people are concerned a another 2008 could happen if be lot, it's going to
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more severe. the marketsober, sold off almost 90% and took until 1953 to recover. there are some people very theied about terrorist in capital markets >> george soros sold stocks. which is the most prominent. maybe the that's the wrong way of looking at it. all the assets are interconnected now. >> well, one way to do it is gold. another is cash. i've seen a huge increase in interest in hedge fund strategies that aren't to markets. first strategies -- >> don we got to interrupt you for a moment. a have bernie sanders making statement now in washington. let's listen. >> during the course of this what they said in the beginning, they would not scales.r thumb on the they contempt thei -- they keptr word. i appreciate that. our campaign has been about
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building a movement which brings working people and young people into the political process. to create a government which of us and not handful of wealthy campaign contributors. we will do everything we can to currently drift which exists toward an ail gothic form. we should not be disabled food on the table because of inadequate social security benefits. we should not have the heist
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of all childhood poverty of almost any major country on earth. not be having inricans in inner cities rural communities on native havecan reservations who life expectancies lower than worldeople in third countries. we should not be having many of our young people leaving college debt. in we should not be having in this infrastructurean which is crumbling when we have millions of workers prepared to rebuild that infrastructure and in midst of that, we should not be having a situation where wall america andrate billionaires are failing to pay their fair share of taxes. the issuesome of
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that many millions of americans mye supported during campaign. these are the issues that we the democratic national convention in of july.hia at the end clearly to myould mind and majority of americans, a disaster as president of .he united states is inbelievable to me that the republican party have a president who in the makes bigotry and discrimination a cornerstone of his campaign. peopleiew, the american will not vote for or tolerate a candidate who insults mexicans and latinos, who insults muslims, who insults
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african-americans and women. am going tosay, i do everything in my power, and i as hard as i can to make sure that donald trump does become president of the united states. i will be competing in the d.c. primary, which will be held on next tuesday. of the the last primary democratic nominating process. i will bepoint that making to the certains of the district of columbia is that i am strongly in favor of d.c. state hood. vermont, which i represent, has about the same residents that washington d.c. has except we senatorsunited states and one congressman with full does not.le d.c. that does not make any sense. full i look forward to the counting of the votes in
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california which i suspect will a much closer vote than the tally. vote i spoke briefly to secretary night and iuesday congratulated her on her very strong campaign. i look forward to meeting with her in the near future to see how we can work together to defeat donald trump and to create a government which represents all of us and not percent.one thank you very much. from vermont,tor bernie sanders, the democratic presidential candidate. him saying that he was suspending hid presidential campaign or he was race.ng out the he did have a few things to say. it was more akin to the stomp speech that senator sanders has made. he did meet with president obama at the white house. said that he believe that
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donald trump, the presumptive nominee will be a disaster as president for the united states of america. said, he believe racial intolerance and hatred were cornerstone of mr. trump's campaign. senator sanders said he will be secretary clinton in the coming day to see what they anddo together to unite make sure that donald trump does not become the president of the united states. withor sanders met president obama at the white house that meeting according to came aters campaign, senator sander's request. there had been some concern and circles because of the heated rhetoric during the betweenic primaries mrs. clinton and senator sanderses. split inhere will be a the senator sanders campaign. sander supporters would not support mrs. clinton who it likely the democratic nominee.ial
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based on the associated press delegates and those superdelegates who have not yet support forr mrs. clinton. that could change come convention time next month in philadelphia. senator bernie sanders just wrapping up his meeting with president obama at the white house. talev is atmargaret white house. not hear the words that he was suspended his campaign or quitting the race. >> that's right. explicitly he intends to compete in the washington d.c. tuesday.hich is next he left abruptly. didn't take questions. many of the questions shouted were, what did president obama endorset when he will secretary clinton. this was the major roadblock to move.ent obama's next we'll stand by for what he does next. he's readyders says
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to talk soon with secretary clinton. down and talkt with her. hinting slight change in rhetoric. he does intend to compete through next week. >> this president is talking about unifying the democratic party. is that what message that will with sanders supporters. how does he convince them after process? which had remarkably similar mrs. clinton's 2008 race with senator barack obama at the time. was a long shot. he went on that series of upset thens and establishment. >> that's right. bitourse, 2008 was quite a different. then senator obama had been the underdog. then senator clinton was in a different position. senator sanders now talking about he will do anything to prevent donald trump
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from becoming the next deposit. he was astonished the republican party will put him up to be the presumptive nominee. a suggestion way, that he is preparing to come around but laying a marker clear, they intends to compete through next tuesday. fighting up tors the last vote. margaret talev joining us from the white house. >> thank you so much mark. still here with don steinbrugge. we were talking about the may of riskironment and lot in the capital marks. uncertainty about the presidential election is one of them. what does it mean for correlation asset classes? of all, if you look at what happened in january and in they of this year, hedge fund industry, strategies exposure highly corollated. they went down and they went down a lot more. lot of stories about activist
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doing bad, stress debt and. happening is, you beginning to see money shift away from strategies that have a lot of market exposure. strategies uncorollated. you're seeing interest in strategies like direct lending where there's inefficiency in the market. very widespread. can get high return, cta's are of interest to people they -- as a matter of fact, the opposite movement of correlation of the capital markets. markets selloff, most capital market correlations go up. can getllowing cta's negative. you're seeing interest in real like reinsurance. it has no correlation to the capital market. going on ing shift the hedge fund industry away strategied.oriented strategies that protect portfolio. >> there's a question about the liquidity of those alternative strategies. crowded trade.
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>> basic they're all in the same stock. >> again, hedge funds are a structure. they're not an investment strategy. they're a lot of investment strategies within hedge funds that aren't corollated. some of them are highly liquid, cta's. andof reinsurance contracts they do become liquid. you got to be careful what strategies you invest in. returns we'veter seen from hedge fund has led to about how the fee model is broken. get discountsople or founder shares through other means? many people pay 2020? >> there's a lot of discount in fundiscount in the hedge industry. most hedge fund are not lowering their standard fee. are doing for institutional investors, they're
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heavily negotiating fees. these pension funds are getting 25% to 50% discount. get a much better deal funds.all mid-size 60% of hedge funds have less 5% of assetslion, are going to hedge funds assets.ion in lot of them are coming out with founder shares. >> incredible. don steinbrugge, thank you so much. still ahead on "bloomberg alphabet ceo is starring two dualing start-ups. to develop cars that fly.
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>> flying cars could soon become a reality. and other big thinkers at silicone valley have anything to do with it. head of global technology coverage brad stone now. us it still hasn't become a reality. ones to do it.e yearsl, you knowe know for 20 it's been fiction. it seem fanciful. happening now, not google related. it is larry paige related. thegoogle founder of alphabet ceo is investing in this privately. of number -- he's one of a number of barometric entres that it's feasible. advancement in electric motors, computerized stabilization systems. autonomous navigation systems it feasible. learn paige personal -- larry companies,cking two
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both in silicone valley and other companies as well around the world that are pursuing this car. of a degrein -- flying wha-- >> that's some good background. my cowriter, basically been working on this for five years. all of these efforts are very secretive. larry paige obviously did not talk to us for this story. the detailsir out for both companies. there's a company down in santa cruz that's working on a prototype. it's what you'd expect. very complex safety system.ai, navigation it's the flight systems. rotors to take off and land.
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hopefully a little cheaper than that. you hundred plus miles per hour to your destination. replace the can excite. -- commute. crazy.ds thatu know what's crazy fly car looks like a flier in star wars. >> maybe star wars got the idea. along isanguage is -- development? any testw if there's flying anywhere in the california area mentioned one of the , sky car. i remember going to conferencens years. seeing his purple prototype floor.t on the that was like your tinker who able to fly.was
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he probably spent $100 million on the effort. declared personal bankruptcy. more recently it's become reeler. paige does fly test aircraft out of the hollister prototypes are flying now. it's happening. obviously, this thing has to be than 100% safe. autonomous car. you're working with gravity. is$30,000 tesla for example much cheaper than tfx you were to 120 thousands for four seats. what's the demand like something expensive? >> those numbers are hypothetical. it's probably too early talk about the market. a differentn of
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kind of transportation. it's breaking the morning commute by flying in the sky.eded if it works, there will be a cost curve and cost reductions, probably better to think this uber-like service exist. in that case, it means getting out of traffic in the morning, it would be unlimited. it might change the world. stone, thank you so much. i love the last line of brad how invention is in siliconell valley. >> this is "bloomberg markets."
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>> this is "bloomberg markets." the bloomberg business splash. look at biggest business stories in the news right now. is rolling out a new service to allows customers to
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rides.e they can be scheduled 30 minutes or 30 days in advance. to schedule a ride is top requested feature from business travelers. form of golden parachute. this one gets triggered if fired. executive gets viacom chief could leave without $63 million. is controlling shareholder and doesn't offer dooley the job. last week red stone lawyers said considering change to viacom's leadership. silicone valley. don't waste your time trying to buy spotify. out a bigver sell u.s. tech company. selluropean companies do themselves holding back the region's technology sector. that is your business flash update. >> we're looking at stocks in the red. it's a global phenomenon.
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dow are off by a third and one percent. you pretty much see that we started off in the red in asian trading. openurse european markets there, it was another down. here you go. ais is when u.s. markets open decline there. this comes in the face of recent gains >> you are seeing money move in treasury markets. 1.67%.ld >> unbelievable. coming up in the next hour. we're sitting down with the and president of the chicago mercantile exchange duffy.
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scarlet: welcome to bloomberg markets. alix: from bloomberg world headquarters in new york, good afternoon. here is what we are watching at this hour. european policymakers are gathering in belgium before the brussels conference in whitley are from european investment tank president werner hoyer. iger talks about investments in china and why the company is investing so much in the kingdom. chairman terry duffy joins us in the studio we will ask him how serious he is about threatening to move the exchange out of illinois. meantt: by kingdom, i middle kingdom.
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anyway, let's go to the markets desk with julie hyman. not yet perhaps as a disney movie. let's take a look at stocks. the lows a little bit at the moment but all three major averages are still in the red with volume still down. market feedingd .ack we have people buying treasuries which is pushing the yield lower which in turn is hurting banks today. the yield is down to 1.8%. -- 1.6%. there is pain since financials are the most heavily weighted group along with technology in the s&p 500.
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some of the other declines are nrg energy. it was hit by a downgrade. gold is falling along with copper prices. we have this risk off sentiment. looking at the u.s. dollar, we have been watching that as we watch commodities and it is higher as commodities are lower. we are seeing some money shift into what investors see as more safe havens. the dollar is benefiting from that but the dollar was falling versus the japanese yen. alix: you can also look to earnings for the direction of some stocks. julie: tailored brands is out with its numbers and those were
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negative so the shares are taking a big hit as the company has struggled ever since the merger happened. restoration hardware is suffering. the company posted an unexpected loss come up laming a partially on currency effects but generally what has been happening in retail. ucker, it looks like coffee demand is helping out that company as well as pet food demand. i learned earlier that david weston's favorite is smuckers red strawberry jam. scarlet: i am partial to grape. markjulie: old school. alix: let's check in with first word news. i don't know how i feel about that segue. he will doers says everything he can to prevent donald trump from becoming president. following a white house meeting with president obama, senator sanders did not endorse the
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presumptive nominee, hillary clinton. >> i spoke reflate to the secretary clinton on tuesday her onnd i congratulated her very strong campaign. i look forward to meeting with her in the near future to see how we can work together to defeat donald trump and to create a government which represents all of us and not just the 1%. sanders requested the meeting with the president and is under pressure to drop out of the presidential race. mrs. clinton is mobilizing a major fundraisers for the general election. been askeders have to match with a raise for the primaries and the clinton campaign wants to raise $1.1 billion by the november election. more than 100 firefighters are rattling a fast-moving wildfire in yarnell, arizona. hundreds of homes of been evacuated in the fire is now at
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least 600 acres but the crews are expected to ease during the overnight with cooler temperatures and higher humidity. it's the same town where of lays killed 19 members of an elite firefighting crew back in 2013. doctors say the former italian premier silvio berlusconi is suffering from a leaking aortic valve and will undergo surgery to fix it. his personal physician says the 79 euro billion or will undergo surgery before the middle of next week. and reportedmaker heart irregularities over the weekend. news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. scarlet: european finance ministers and economists are gathering for their annual brussels economic form hosted by the european commission. let's go to brussels with matt miller. matt: thanks very much.
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thank you so much for joining us. at this conference today, one of may ben focuses improving productivity and creating jobs and improving competitiveness and that's what you as head of the european investment bank focuses on most. talk to me first about how dire this is, the situation, and how necessary it is to boost investment in the european union. >> it's very serious. we lost 20% of investment in europe. that was after the lehman brothers crisis. it's surprising that we did not recover afterwards. thane still 50%-60% lower 2007 in addition to an innovation gap the . it is my time to change that trend. if question comes up that
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you have good projects but you still need financing at a timeline liquidity is available. matt: we saw the yield dropped yesterday to almost nothing. we are up to our eyeballs in liquidity. how do you encourage people to take a risk and use that money and put it where it's needed? >> risk-taking is the problem because people have troubles with identifying a bright future. of putting too much into risk that they cannot manage. we might have to give them an incentive to the higher end of the risk scale by taking away part of the [indiscernible] so to speak. it is simply a move a budgetary funds from grants and subsidies to loans and guarantees in order to provide a guarantee facility for investment banks. not investthey would
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in such volume. what does it involve? >> it's a relatively modest shift of budgetary funds from grants to guaranteed facilities. that is something that is easily affordable in a budget of 100,000 billion euros. it should ship 16 billion so it's not that exciting. the question is, what do we do with that? how do we incentivize new investing and take her the risk away from the promoters? this requires a clear definition of what you want. you must be sure that your contributing to the competitiveness of europe.
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providing health services, education, structural and strategic infrastructure in europe which is trailing so far behind southeast asia, for instance. all these things must be in focus of an improvement of competitiveness in europe and that's what the conference is all about. matt: it's a fascinating problem and an incredible solution. i want to ask about specific eib business pertaining to the news of the day. a couple of weeks away from the referendum in britain. is it clear that the european investment banks'investments in the u.k. if they were to vote to leave would be cut off? it seems obvious but i wonder. >> i am not speculating about the decision the british people must make.
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they will take it into weeks and then we will know. it's a fact that the eme has been successful in the united kingdom and they have benefited from its membership in the eib. only members of the european union can be [indiscernible] it's something that the french people will have to take into consideration. matt: you have invested millions of euros in the u.k. and billions of euros increase. -- in greece. do you think their path to growth and sustainable? >> the situation in greece is still difficult but we have to cbo on the macro economic situations. there are good entrepreneurs in greece and good ideas for projects. they have a problem that all of europe has. they are taking risks on new products and new projects. this is something where we can help. greece is one of the key areas. who havethe only ones
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stayed before the crisis and during the crisis and after the crisis. they have good ideas. matt: thank you so much, it's been a pleasure. it's an incredible day at what has been an historic summit that the european commission holds once a year in brussels. it's been a great day to work on this job. scarlet: good job, matt miller. alix: we miss him here. coming up, the disney ceo tells us why shanghai disneyland is such an important step for the company. ♪
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alix: you're watching bloomberg markets. scarlet: let's go to our markets desk with julie hyman. flashback tos a the metal bulletin.
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i'm looking at gold and silver but particularly silver. here they are today. what we see is a microcosm of what we have seen this year. both of them are higher but the silver gain outpaces gold. if you take at look at the year to date, it's the same situation. people have piled into gold as they have been concerned about global growth and they have piled into silver in a larger way. if you look at the year to date numbers, you will see that silver has outpaced gold thus far this year. there you have it. what you see now is that etf holdings of silver are also rising rapidly. you can see that we are near record levels, a record that was reached back in 2014. we are getting close to that level once again. silver as wellf
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to measure it a different way, they reached a high earlier this year and have come down a little bit but buspar, we have seen incredible bullishness on silver. scarlet: thank you so much. turning to the disney plan and theire china entertainment industry is not just about the ambitious shanghai resort that opens next week. disney also want to make movie magic and what will soon be the world's largest film market. tom mckenzie spoke with ceo bob iger about the disney production progress in china. >> we are very far along on this process including developing ideas, concepts, 4 films and identifying talent to make those films. >> can you give us more clarity on the timeline? >> um, shortly. >> within the year?
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>> we don't have -- we won't have a movie released in a year but within production. scarlet: for more on the big disney china that, let's bring in an analyst from princeton. what kind of pay off his disney looking for to produce movies in china? >> we are seeing more and more studios banking on foreign markets. china by far is the biggest market. it's now the number two global movie market just behind the u.s. but we have seen in the growth in the u.s. peak in all off. the chinese box office has been surging and grew about 49% last year. it is poised to become the biggest market in the world sometime next year. what disney is trying to do here is circumvent some of the local regulatory restrictions. there is a restriction on the of films that can be
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imported into the country and a limit on revenue shares. disney is looking to circumvent both of those with local production. iger view the bob future of china where everyone is worried about the chinese slowdown? >> this is a large country. the number of people who can afford to bring their families here for it to a or go on their own for eight day is huge. we have said there is something in the neighborhood of 330 million people who can afford it a visit to this park and they live within a three hour trip to this park. that's an extraordinary number when you think about it. this is a big, deep market. a slowdown of today's economy, we don't believe it will have any impact whatsoever on the business. why is disneyland so important to disney? >> it is such a huge bet for
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disney. along with her local parks, they spend 5.5 billion dollars on this project under years of construction. as he mentioned, the potential is huge. shanghai is one of the most populous cities in the world. there is about 330 million visitor potential there. despite all that talk about slowness in the chinese economy, we have not seen that on the entertainment side. box office is up like 50% and we have seen themepark attendance surge. scarlet: thank you so much. ♪
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scarlet: this is bloomberg markets. alix: the winning streak in global stocks has come to an end. people are buying on zen the
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yields are going down. msj index peaked at an all-time high. for more on what's weighing the markets and on investor sentiment, let's go to carol massar. ol: thank you so much. we have the managing principal at peyton and regal who have roughly $100 billion in management. does this market environment make sense to you? >> no, but it does not make sense to a lot of people. i like to say there are the unexpected happening with greater frequency. it makes it exciting. you never know what will happen. you have to strap yourself in. getting ansay we are
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increase in asset class agnostic investors? >> i say it is the byproduct of the volatility we are seeing. we are asked what people should be doing with all this randomness and volatility. i think it gets back to the basics of diversification. normally we think about diversification as don't invest much of your money in one company or one issuer but it's more broad than that. it's now about if you are a person who focuses on bonds, be more open about the kind of bonds. think about converts or bond like instruments like referred stocks. do you have to rein in your expectations on returns? >> it is a different environment. yields are lower and their view is that they probably will be relatively low for quite some time. this will be upon us and you have to be more flexible. carol: we've got the fed meeting coming up next week.
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what about july? we only have a few meetings left. >> it is likely that nothing will happen this month but think how quickly that changed. it wasn't much more than two aeks ago where there was significant probability they were going to go. it's fun to talk about what and when they will do but it's more important to know about the trend. about you talked diversity as an old golden rule. howdy you do diversification in this environment? >> you expand your opportunities. you are clear on what your objective is whether that is more yield or more income and then be very open and more flexible in terms of anger you're willing to look at to get that return. what are the more flexible and open ideas you are
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suggesting to your investors? >> we are one of the few people -- you hear about mom and dad in bonds make sense. i have said that there is a bond for all seasons. carol : what is the bond today? >> four or five year maturities and corporate make sense and municipals make a lot of sense. they are very stable in environments like this. finally, equities that have income characteristics like efforts stocks and reits. carol: are you staying away from high yield? >> we are staying away a little bit but not entirely. we have seen gold moving up and energy bouncing back, are there opportunities in those areas? >> there are but i think i would certainly -- i am not an expert but those are areas that are inherently much more volatile.
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one just have to be careful. they should be done on a diversified asus rather than one commodity and secondly, expect a lot of volatility. are you at all anticipating we could see some kind of recession in the near term. >> i want say zero but i think there is a relatively low probability in this country. the u.s. is on a nice growth trajectory and can always do more but we've got a very robust job market and wages are slowly starting to pick up. i think we will continue to see consumers spend. carol: does this market cycle remind you of any other? um, i would say a lot of this is unprecedented for a lot of reasons. the volatility is not we haveily new but never gone through a political
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process like we are currently going through. that is one thing that is very different this time than many of us have seen. carol: thank you so much for coming by. thank you so much. scarlet: thank you so much. alix: we will look over a plan plans in financial illinois. we'll talk to the cme group chairman who says a plan would be a disaster to move the cme out of illinois. ♪
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alix: you're watching bloomberg markets. illinois is home to the chicago
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mercantile exchange and other exchanges is debating whether to impose a tax on trading. scarlet: it's a controversial proposal that could affect millions of transactions. the cma says -- the cme says it would be a disaster. terry duffy is here with us now in new york. tell us what the impact would be for the cme and how you are prepared to fight it. > there would be no impact for the cma or the state. they are proposing a tax of roughly two dollars per trade. the average trader makes $1.15.e from $.40 -- from day one, you will charge -em one dollar 60 per trade $.85 a trade so no one will make one trait so no one will make a penny either way so it's a ridiculous proposal. they are trying to raise $12 billion off of this it's based off of notional value.
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it's $255,000 average promotional value. as i said to the joint committee, if you sold a house is a real estate agent in the house was $100,000 and bit -- as an agent, should be you be taxed on $100,000 or the prophets? it's the same thing, you cannot do it in notional terms. it's in a rational proposal. i give them some solutions to come up with long-term plans.nobody wants to listen to that because people are looking for the next election term. alix: any chance you would move the cme out of illinois? if it means moving out, it would be my customers not participating. if you don't have customers come you don't have this was. i am not threatening anyone in illinois or anywhere else but the bottom line is my clients tol say if you have a chance
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make no money, i have to have clients. i would have no other choice but to move the business and i have 28 other data centers around the country that would welcome me with open arms. scarlet: talk about the level of urgency. you have in making your case to illinois state lawmakers based in the conversations you have had. what do you think are the odds of this actually happening? >> it has come and gone, may 31 was the deadline. we will have to wait for the special session if they want to entertain a proposal like this. i don't see that happening. the biggest penny wise, dollar foolish proposals i've seen in my entire life he just cannot tax liquidity out of any institution or business. the businesses will not be able to operate efficiently. alix: have you talked to your traders about it? >> i get the information for my
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traders. lose $.40 soill how can we pay somebody to dollars? -- two dollars? it just doesn't work. the state of illinois needs to have a long-term plan and look at addressing its issues. we are in a great geographic location we should legalize that. alix: what about competition among the exchanges? are you making any strategic changes? 2007-2008a lot in with our acquisition so we put ourselves in a good spot to compete globally. is shrinkingorld and we are constantly looking at different ways on how we will build our business. sometimes is through acquisitions and sometimes it's through plug and play technologies. we looking both ways to continue to grow the business. i believe the biggest way to
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grow our business is the distribution of our product. we are in 200 countries around the world. the software providers in companies like apple and google are in every household around the world. areas the biggest growth for cme's retail business which is never been a growth area so i want to continue to look the way we distribute our products. scarlet: your customers are concerned about fairness and a level playing field. tell us about the upgrade of your data lines with all customers having the same speeds. >> they have always had the same speeds. you are referring to a new upgrade we put into place where a traitor would know if he or she was filled be for the rest of the market would know. first iflly, you knew you are executed on or not. they knew that they got there trade in a microsecond ahead of the tape seeing that there was a
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transaction and now we've have been able to meld that. that friends us to the question of everything being fair which is the manipulation conversation. dodd frank makes you responsible for any manipulation on the exchange. the cme has come under heat for things like presumably allowing spoofing to be ok on the exchange. how do you fight against those accusations? >> we don't allow spoofing on the exchange. we have always had rules on the exchange. they used to be called disruptive trading before 2010. you had to have the word intent to say there was -- that there was intent. the markets changed dramatically. we have never, ever supported anybodyspoofing in our
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marketplace and we would not. the credibility of the market laces is of utmost importance. we spend a fortune on our regulation of our marketplace internally and externally. these spoofing cases, there has been a couple brought by the government and they are what they are. try to dol always things that are inappropriate which is trading would -- whether it is trading derivatives are selling something on the street. you have that actors out there and there is not enough cops in every corner to stop them all. scarlet: what kind of specific event of measures are you using to root out any spoofing. >> we have a lot of technology today to look at these different activities in a marketplace that we may not have had as little as five years ago but we have had a big proliferation of electronic trading especially algorithmic and high-frequency. with newp new software
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experts to look at the marketplaces and see the tivoli that we don't think is appropriate and we contact the people right away and let them know we don't think it's appropriate. i don't want to say exactly what that is on live tv or in a conversation. if i let you or anyone else know -- alix: we've got taxes from illinois and your dealing with manipulation and the third thing that is overshadowing business is the fed rate hike. what would to rate hikes this year mean for the cme? has been aw, there lot of trading at cme on our interest rate products even without the fed rate hike just because of anticipation. eventually, we cannot be at zero forever. will we go negative like japan? i don't see that happening in the u.s. i think we are seeing a flight of money coming into our sovereign that. even at these low levels. alix: look at europe. >> where else can you go?
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a lot of people don't want to have the risk. a couple of rate hikes i think would be very welcome but not only the making sector but by the savers of the united states of america who have been punished for being savers. now you will have negative so you have to bring the banks of the banks a toaster to give them your money. it's important not to punish savers but to reward them. i think an interest rate hike is well in line. alix: good to see you and thank you very much. chairman and president of cme group. scarlet: let's go over to mark crumpton for a check on first word news. says hernie sanders will do everything he can to prevent donald trump from becoming president. he did not offer an endorsement of hillary clinton. he spoke this afternoon after
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meeting with president obama at the white house. clearly, trump would in my mind and the majority of americans, be a disaster as president of the united states. it is unbelievable to me, and i say this in all sincerity, that the republican party would have a candidate for president who, bigotryear 2016, makes and discrimination the cornerstone of his campaign. senator sanders on the president met for about an hour in the oval office. bernie sanders requested the meeting is under pressure to drop out of the race and hillary clinton became the presumptive nominee this week. we are also waiting for the white house press briefing. it has been pushed back to about 2:15 p.m. washington time.
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massachusetts democratic senator elizabeth warren will go to a new level in the presidential campaign. she is expected to harshly criticized donald trump of her comments about the ancestry of a federal judge. in her prepared remarks, she says donald trump chose racism as his weapon but his aim is exactly the same as the rest of the republicans. a belgian judge has ruled that a suspect in the paris attacks can be extradited to france but he is unlikely to go soon. belgian prosecutors told the associated press that they don't anticipate turning over the suspect to the french anytime soon. they are still investigating him over the march suicide bombings of the brussels airport. he has admitted being the man in the hat filled by security cameras in the company of the two bombers. the weather system known as el niño which was responsible for record-setting heat is over. it is time for la nina which can soakp crops in brazil and
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them with rain in asia and trigger more atlantic hurricanes. there is a 75% chance of la nina conditions. australia puts the odds at 50%. news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. scarlet: thank you so much. alix: much more coming up, this is bloomberg markets. ♪
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scarlet: this is bloomberg markets. alix: let's go over to the markets desk with julie hyman. julie: related to analyst calls
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on these various movers, let's get started with pandora. axiom upgraded the stock on its core business saying the odds of a company building a successful on-demand service is relatively high but at the same time, they're looking at the m&a chances for the company. there has been talk about pandora potentially being a target and axiom sees it as a target. a reasonable takeout price could be $20 per share which is higher than where the stock is now. we are taking a look at linked in. rbc upgraded it saying it still reasonably well positioned against large advertising markets so it's reasonably valued. rbc looked at a survey to come to these conclusions. the shares are rising 1.8% and
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sellly agrium being cut to from outperform. the analysts are looking at the retail unit in particular which makes them -- which makes 3/4 of its sales in my say that transition has been surprisingly slow. we seeing a lot of the kleins today within the fertilizer group. this stock is down one port -- we have seen a lot of declines today within the fertilizer group. alix: the governor of the bank of canada is making a case but there is a booming real estate market. he says it cannot be sustained by fundamentals. scarlet: the comments from the prime minister yesterday as well as their biggest banks are the issue and pamela ritchie has more. how blunt was the bank of governor today? speaking in his twice yearly financial review,
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he said what vancouver and toronto buyers seem to beginning used to and perhaps sellers are getting used to in terms of huge price gains in these cities is something maybe they should not get used to. he said history is not necessarily going to equal the future and vancouver house prices in the month of may were up year-over-year by 30%. toronto houses were up 15% in the same period of time. these huge accelerations are something that are not necessarily sustainable. using theoints to share of the rise in mortgage up to 450% of the buyers income. we see more and more the those in the bargain market. he says those are intervening to risk and he made a rad -- a rather thinly veiled hint perhaps to the government that have to and initiatives by the government to enter the market and tighten the overall housing arket might be useful as offer any said the past mortgage
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changes have made the system resilient. there were a few changes in the fall of the mortgage side that have helped to rein in the system but not too successful. he is hinting at the government doing more. scarlet: thank you so much. we have breaking news -- alix: let's go right to mark crumpton for more. mark: the washington post is reporting that president obama will offer a formal endorsement of the presumptive democratic presidential nominee, hillary clinton. this was something that was expected. president obama and senator bernie sanders held talks at the white house today. afterwards, senator sanders spoke to reporters and said he would help to do whatever he could to prevent donald trump from becoming president but he did not offer a formal endorsement of mrs. clinton. where theeiving word washington post is reporting that president obama will offer
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a formal endorsement of mrs. clinton. we are also hearing the presidt obama and mrs. clinton will campaign next week in the state of wisconsin. we will follow this breaking news and bring you more details as soon as we get them. scarlet: thank you so much. we will keep an eye on those headlines. alix: time for the bloomberg business flash, look at the against business stories. scarlet: household wealth and the ua's increased -- in the u.s. increase in the first quarter. the federal reserves is net worth for household a nonprofit or $88 trillion. apartment renters in manhattan have the upper hand for a change. landlords are boosting incentives to lure tenants. the reason is a surge of supply giving renters more choices and an opportunity to bargain. one free month of rent was included in 13% of new leases,
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up from 2% a year ago. scarlet: mark crumpton has new details from washington. mark: thank you. i am joined once again from the white house by margaret. we mentioned that the washington post is reporting that president obama will offer a formal endorsement of mrs. clinton. do we have a timeframe for that endorsement? >> we expected imminently. the reason the white house press reading keeps getting pushed back his we believe the clinton campaign on the white house are coordinating their messages and we will hear from everybody shortly. this has been anticipated for a while. bernieting with sanders earlier was the last remaining stumbling block. we know that the vice president 's meeting with senator sanders at the naval observatory later
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today and we'll hear from the vice president and elizabeth sanders later -- elizabeth warren later tonight at a meeting of progressives in the legal community. we are not expecting endorsements but i would expect to hear strong language, the prequel -- the precursor of an endorsement. mark: the primary season is not officially over. there is a primary next week in washington, d.c. if the president endorses that, inlinton, does fact, mean that the residents of disenfranchised? will they vote knowing that the president has said this is over? came outenator sanders to the microphones after his meeting, he laid down an important marker that if you are a d.c. resident and in caring said foreign politics, he he would campaign through at least next week's contest in
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d.c. and it's all about d.c. statehood. it's rallying cry for people to make a statement for statehood. what happened on tuesday night in the final six contest solidified the position of secretary clinton. bernie sanders wants to compete to the last, the math has spoken for itself. he will have another opportunity at the rally tonight to frame this in a way where he gets his message out to his supporters. mark: the outgoing president will be campaigning with secretary clinton but how key will it be for senator bernie sanders to also join mrs. clinton on the campaign trail? >> that's really important. the exitrs ago, polling conversation suggested that then senator clinton supporters were not ready to go to then senator obama. between the weeks of then and
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the convention, they changed their mind and there was a wide believe that would happen to some degree. it could happen to a larger degree of senator sanders were more enthusiastic about supporting senator clinton. very much inmatter terms of turning out the progressive community and younger voters. mark: we are receiving word that president obama has released a video tweeted on mrs. clinton's account announcing his endorsement of mrs. clinton. talk about the white house and the clinton campaign trying to coordinate things. is this something that had been going on behind the scenes for a while now? been calling mrs. clinton the presumptive nominee for quite some time. >> the delegate mass suggested after march 15 the pattern was locked in and it would be difficult for senator sanders to adjust.
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one thing he said upon emerging from the meeting today with president obama was that the vice president and the president had promised him they would keep their phones off the scale and he thought they had lived up to that promise and he appreciated it. if you look at the staff at the white house and the clinton campaign, many have been with the clinton administration and are now in the old, white house and there are natural friendships and alliances. publicly, the president has not shown his cars but he has hinted. he is not put himself in a position that is unduly tipping the scales in her favor. mark: you can see on your screen the video we were speaking of. the president of the united states is endorsing democratic residential candidate, the presumptive nominee, hillary clinton. the president's message was sent on mrs. clinton's twitter account. megan murphy will be joining us as well.
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she is on set with scarlet and alex. what are we to make of the fact that the president has finally endorsed bernie sanders and that he will be on the campaign trail with mrs. clinton in wisconsin? >> the president's approval ratings have gone up and he is now ending his final term as president with higher approval ratings than we have seen in many years. this is going to make a difference particularly among exciting the base. that's what president obama can add to the campaign is get momentum behind hillary campaign -- to hillary -- behind hillary clinton. that he can add the magic touch and a little did andhe old bomb a gravitas majesty that people remember from 2008 and 2012 and that she can be linked with him. unitedd become a more
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message. mark: none of us were in the room of the oval office on the president and bernie sanders had askmeeting but if we could the fly on the wall, what do you suppose he said to senator sanders other than you did a great job but i think it's time. >> i think he said to please stand aside and think about the party and what we can accomplish and mostly what we are risking in the democratic party if donald trump defeats hillary. that is the message he will be bringing. get out ofult to these races especially after you have done what ernie sanders has, driven a campaign that has a to movement of people and raised ideas that have resonated so strongly at a time of true economic dislocation. he will have said to him that fantasticave done is but your time is over and it's time for hillary clinton. i'm wondering if mark or
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distilled standing by. thank you for your patience. to have been seems decided in the president has endorsed mrs. clinton and there will be some campaign events that they will carry together, what is the white house machine doing? carrye they trying to through the last obama years of the white house to making sure that mrs. clinton does become the next president? what's going on behind the scenes? >> one thing we will see is the travel. the optics will be important and andmessage of continuity the idea that hillary clinton is poised to carry out the aspects of the obama administration that have been successful that brought us out of the 2008 financial crisis. the delegate message may adjust a little bit. in the summer to come, the president will have to balance to imperatives. secondhis legacy and the
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is how the legacy can help continue with a democratic president and the white house so his legacy has a better chance of surviving. on the economy and jobs in social programs and on some of a difficult area may be in issues of trade or other areas. has gone alinton little bit to the left for the primary so some balancing all happened there. mark: as we'll know in the media after covering the story for the past year and a half because the campaign season usually starts the day after someone was sworn in as president, this has been an interminable campaign season. that having been said, at the beginning, and donald trump's candidacy was laughed at, it was mocked. is the white house scared now? >> the white house is up to
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mines -- two minds. .here are rational statistics they are not as worried about it because they see him as being a divisive leader even within his own party and having trouble reaching across to independents and democrats. the white house also recognizes incredible instinct and stagecraft and theater when they see it. on the spectrum of donald trump and hillary clinton can see that donald trump is an instinctive performer who manages to shake rings up so much in his own primary that even if it is not transferable to the general election, there are aspects that may put hillary clinton in a box. part of the president's role is maybe to be the attack dog against donald trump and the defender of secretary clinton in a way she may not be able to do or in her position be able to do. reports i havee
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seen on television and in print have said the resident is just itching for this fight. he wants to get on the campaign trail and has wanted to for weeks. will he be an attack dog, the one who says i don't have to answer to the electorate anymore so i will just let loose? he wants to see a democrat succeed in the white house. particular has gotten under his skin. he helped fuel the birther movement. there is an element of something personal about this. and you see this in the pacing of them waiting until the right time to come forward with this endorsement, he wants the political attacks in the long run to be helpful and there will be a constant calibration of what his instinct is versus what the clinton campaign is comfortable with. mark: how do you get all the
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sides together? summer working at the white house with the obama team and the clinton team -- is it a question of picking some from both sides or mrs. clinton saying here's who i want? is goinginton campaign to be in charge in terms of timing and the obama administration wants to be helpful. screen -- thehe scenes discreetly. we expect there to be a meeting begin -- between secretary clinton and senator to the extent that president obama can help put that in place shuttle diplomacy between the two sides, he will do that. the white house has indicated very clearly the

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